Appeals court says insurers need not cover Chiquita settlements

An Ohio appeals court Friday upheld wins for insurers in two suits against Chiquita Brands International Inc. over coverage for settlements resolving lawsuits brought under the federal Anti-Terrorism Act.

The three-judge appeals court panel in Travelers Property Casualty Corp. et al. v. Chiquita Brands International Inc. said the underlying suits accusing the fruit producer of funding a terrorist group in the Republic of Colombia did not involve a covered occurrence.

Chiquita had sought reversal of the insurers’ summary judgment awards, arguing that it did not intend to harm six Americans who were kidnapped and killed by the Armed Revolutionary Forces of Colombia in the 1990s by making payments to the group. Chiquita said it made the payments to protect its land and employees, court records show.

“The natural and expected consequences of sending protection money to a terrorist group engaged in a campaign of violence is that the group would use the money to continue that violent campaign but select different targets,” the court said.

The appeals court also rejected Chiquita’s contention that the trial judge erred by viewing its argument as an extortion defense and by relying on a 2013 ruling that American International Group Inc. unit National Union Fire Insurance Co. of Pittsburgh, Pa., had no duty to defend it against the ATA lawsuits.

The families of the terrorism victims sued Chiquita in federal court in Miami in 2008 under the civil liability provisions of the Anti-Terrorism Act. The lawsuits were later consolidated and settled in 2018. 

Two groups of insurers, led by Travelers Cos. Inc. and Chubb Ltd. unit Federal Insurance Co.., sued Chiquita in Ohio state court in Cincinnati in August 2013, seeking a determination on their coverage obligations. The parties filed competing motions for summary judgment, and the trial judge found in favor of the insurers.

Representatives for the parties did not respond to requests for comment.